In the summer of 1974, Brian Clough was named manager of Leeds United. It was the low point of his career. He had gone into management after injury forced his retirement as a player and was an instant success, turning round the fortunes of Hartlepools United and then Derby County (whom he took from the foot of Division Two to the League championship in five seasons). Later, with Nottingham Forest, he won the League in 1978 and the European Cup in 1979 and 1980. By his retirement in 1993, 'Cloughie' was one of the greats.

But something went wrong at Elland Road. In the early Seventies, Leeds were both the best and most hated team in England, renowned for their win-at-all-costs attitude and uncompromising style. Clough's mistake was to try to mould them in his own image. He dropped the mainstays of the squad assembled under his predecessor, Don Revie, and brought in players from Derby. He encouraged the team to play a more attacking game. The players revolted and the board lost confidence in the new manager. Leeds won just one of their six first league matches and were knocked out early from the European Cup: Clough was given a golden handshake.

In The Damned Utd, David Peace dramatises this ill-fated episode. The novel opens with Clough's arrival at Elland Road on 31 July; it ends, 44 days later, with his departure and takes us directly into the mind of a man who, for all his abilities, was tortured by paranoia and self-doubt. Alcoholic, unpredictable and egotistical, Peace's Clough is driven not so much by a desire to excel as by a wish to get even. He takes the job at Leeds (a club he despises) out of a wish to poison the legacy of Revie (who had beaten him to the job of England manager). Clough's one redeeming quality is his ability to inspire loyalty; at Leeds, however, even this deserts him. He makes no effort to get to know the players and barely bothers with team talks or tactics. Instead, he spends his time holed up in his office, imagining the conspiratorial voices echoing 'down the corridors'. He considers the club to be a 'hateful, hateful place'. It is a relief when he is sacked.

Peace, who in 2003 was voted one of Granta's 20 Best Young Novelists, has long been interested in the private side of public events: in 'The Red Riding Quartet' he tackled the Yorkshire Ripper murders; his most recent novel, GB84, was set during the miners' strike. In The Damned Utd, he depicts a country riven by uncertainty and despair - Clough's travails are set against the two general elections of 1974 and the Watergate scandal ('I pick up a paper and try to read it, but it's all about Nixon and resignation, resignation, resignation'). His terse prose conveys this bleak, edgy atmosphere; it is well suited to the repetitive nature of this Clough's thoughts.

There is much here to interest general readers. Clough belonged to an era in which nearly everyone - players and managers alike - smoked continuously. Teams sat down to meals of steak and chips before matches; training twice a week was thought excessive. Money had yet to flood the game and the sums involved seem comically small in comparison with today's exorbitant transfer fees and wages. When Clough's salary is raised to £15,000, he points out with pride that it is 'double that of the Archbishop of Canterbury'.

The novel raises intriguing questions about the myths surrounding football managers. According to the game's lore, successful bosses are all-knowing, capable of transforming a team through force of personality and tactical nous. Today, Jose Mourinho - the self-styled Special One - presents himself in these terms. Clough was no less convinced of his brilliance and often portrayed himself as a quasi-mythical figure. Yet how much of a talisman was he? According to Peace, his success was founded on his enduring partnership with Peter Taylor, who scouted for players, oversaw training and made most of the tactical decisions. Clough's period at Leeds was a rare time when he wasn't assisted by Taylor; and, as Peace makes clear, he was stumped without him. The conclusion of this inventive novel is that Clough wasn't quite the genius he considered himself to be.